Driven: Fiat Panda 1.2 Lounge

The Fiat Panda is an urban runaround that's as fun as it is practical.

Amid all the hullaballoo over the funky Fiat 500, it's easy to forget about its no-nonsense sister, the Panda. As well as parentage, the two share platform and engines and much else besides.

Despite the plain exterior, the Panda is every bit as fun as the 500 and a lot more practical to boot. Talking of which, it's a mini van with the rear bench folded but that's not as practical as split/fold rear seating. I'm won over by the Panda's utilitarian chic, but not having a split/fold seat on any of the range smacks of unnecessary penny-pinching.

The rest of the interior is what Fiat does best – bright and stylish, nicely finished, with snazzy fabrics providing a huge dollop of fun amid the practical, durable plastics. Occupants sit fairly high and visibility is excellent, making it a breeze in the cut and thrust of urban driving.

It's not perfect, however. As Andrew English reported from the launch, the top of the dashboard reflects very badly on the screen, even in weak sunshine. And although the squarish speedo and tacho look fantastic and wear stylish numerals, they're not the easiest to read at a glance. With the steering wheel adjusted to my taste, the important numbers between 20 and 90mph were obscured by the wheel rim.

It's a hoot to drive, with smooth, light controls. The change action for the five-speed manual transmission is also slick, which is just as well because you'll need lots of revs and copious amounts of gearchanging to maintain swift progress because the 1.2-litre petrol engine musters only 69bhp. A 14.2-second 0-62mph acceleration time tells you all you need to know.

Driven this way, the economy obviously suffers. The official EU Urban figure is 42.2mpg, with 54.3mpg Combined. On paper, Fiat's two-cylinder TwinAir (£1,200 more expensive) is more economical and has lower taxation, but you'll end up driving it in the same manner anyway.

That's because outright performance is irrelevant in cars such as this. In fact, I'll wager this Panda will be much quicker around town than almost anything due to its size and nippyness. It's not the last word in handling prowess, but despite a bit of thumping the ride is generally excellent. It's a cinch to park, too, while its unpretentious nature won't attract unwanted attention.

A new, 4x4 version has just gone on sale. That's too expensive for a city car (and who actually needs all-wheel drive in town) so why not have the brio of the 500 in a much more practical package?